Current system regime – options for change

Gareth Evans

Impacts of process

Shipper feel unable to rely on costs, so difficult to justify internally, except by scale.

Similarly long implementation lead times cannot be reconciled.

Business solution development hampered by apparent disconnect between public discussion and system development.

Process seen to be overly rigid at times, and slowing down industry change.

Excessive time spent debating appropriateness of cost allocation.

Impacts of process

User pays means shippers will pay for changes if progressed inside, or outside of the UNC.

Shippers have much greater control over costs and processes outside of the UNC as working outside of monopoly environment.

Resulted in movement of services to 3rd parties (NRPS, AUGE, AMR datahub), rather than with xoserve.

Risk of fossilisation of xoserve systems/processes. Increase in complexity in governance (creation of 3rd party

vehicles, increasing reliance on UNCC/Panel for oversight).

Principles for Change

Two guiding reasons why process felt to be inadequate: Costs cannot be verified by Shippers. Lack of oversight over xoserve activities means Shippers

prefer alternative routes. Two principles need to be furthered to improve

framework: Transparency Rigour

Following are a series of possible options that would further these two principles.

Oversight Committee Creation of committee to handle detailed change

management activities. Expect to be a working committee that would evaluate

changes when raised and actively work to identify costs, in particular efficiencies.

Would have access to information so it can challenge solutions and build assumptions.

Composition (fixed or variable depending on change?) Shippers Transporters Xoserve

Adds another layer to the change management process.

Board Structure Changes

Placement of Shipper representatives on xoserve’s board.

Can be executive or non-executive members. Would expect to have same powers/responsibilities as

other board members. Gives Shippers access as well as a say in xoserve

activities. Does not alter xoserve day-to-day activities. Would require changes outside of the UNC.

Tender of processes

Xoserve tenders for some/all services, as opposed to providing them internally .

Gives flexibility on service provision. Brings commercial pressures to bear. In itself does not increase transparency on process,

would increase confidence that costs are efficiently incurred.

Would require licence changes.

Legal/complete Separation Xoserve is legally/completely separated from transporters Three ways of doing this.

Creation of wholly owned-transporter entity with separate board and framework (Elexon Model)

Creation of separate licence entity, appointed by tender by regulator (proposed DCC model).

Creation of organisation equally owned by all Transporter/Shipper licence holders (SPAA/MRA model).

Gives maximum transparency as ownership is effectively industry-wide.

Cannot be progressed in the UNC.